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Thursday, September 13, 2007

Power Grid IPO subscribed nearly 65 times

The initial public offer of state-run Power Grid Corporation of India (PGCIL) received bids for nearly 65 times of the issue size, generating demand for a record-smashing Rs 1,95,000 crore worth of shares.

The country's biggest transmission utility's IPO received bids for 3,719.76 crore equity shares against the 57.39 crore shares on offer, as per the latest data available on the bourses. This is 64.81 times of the issue size.

The company is expecting to raise up to Rs 3,000 crore through its issue, for which the price band has been fixed between Rs 44 and Rs 52 a share.

The proceeds would be used to part finance 15 projects that entail a total investment of Rs 12,280 crore. PGCIL owns and operates 61,875 circuit kms of transmission lines.

The proposed 15 projects would enhance its transmission system by 13,022 circuit km.

The company has inter-regional electricity transfer capacity of around 14,000 MW and plans to scale it up to 37,000 MW.

PGCIL is the third central power utility to tap the capital market for raising funds after NTPC Ltd in 2004 and Power Finance Corporation early this year.

As in the case of NTPC and PFC, the government will piggyback on PGCIL IPO to divest five per cent of its stake. While NTPC had raised around Rs 5,400 crore, PFC had mopped up nearly Rs 1,000 crore.

FII: + Rs 282 Cr; MF + Rs 73 Cr

FII Gross purchases Rs 2392 Cr, Gross sales Rs 2111 Cr, Net Buyers Rs 282 Cr.
MF Gross Purchases Rs 721 Cr, Gross Sales Rs 647 Cr, Net Buyers Rs 73 Cr.

The positive flows despite ranged markets gives some comfort. All eyes are on the Fed decision regarding interest rates. The Mid cap counter continues to attract retail investors. Wait and watch approach is advocated at the moment.

Market Close: Upbeat ranged action !

It was a ranged session for Indian markets. Even in absence of global cues, Indian indices started the day on a fair note. The damp Industrial production figures failed to dampen the ethusiasm.. as the markets digested the slower 7% growth blaming it on the low base. Investors' mood remained positive throughout the day. The buying momentum kept the indices to trade ranged in green. However some profit booking set in during mid day but buying emerged and markets managed to close with modest gains. Asian markets ended in green, European markets were trading in red at the time of writing this. Value buying was seen in index heavy weights like Maruti, SBI, HDFC Bank and ACC. Most of the indices closed in green except FMCG. It was Auto, Banking and Cement stocks which witnessed value buying. The Govt postponed the meeting for the subsidy for Fertilizer companies as result of this the stocks came off. This has been a sector which has been rallying quite strongly oflate. Mid and Small caps were closed inline with the front line indices.

Sensex closed up by 109 points at 15614. It was helped up by gains in Maruti (892.1,+4 percent), SBI (1675.85,+3 percent), HDFC Bk (1212.6,+3 percent), ACC (1128.8,+2 percent) and Grasim (3264.45,+2 percent). Restricting the gains are HLL (215,-1 percent), Hindalco (153.95,-1 percent), Dr Reddys (641.55,-1 percent), TISCO (706.6,-1 percent) and Rel Energy (889.55,-1 percent).

SBI's intention to raise money brought in the buyers. Higher equity clearly means that the 20% FII stake will be vacated and fresh buying would get possible. Thats an odd reason for strength for SBI.

We reran a note on Navneet Publication. The company seems headed the Educomp way. It has managed to develop content which it has already sold to 20 schools in Gujarat. The e-content for Maharashtra is slated to be online by November. This e-initiative should change the face of the company from being a laid back one to one that is leveraging its position in the Education space using all available media. Do read the note We had a Wow call on this and the stock is now at Rs 78 . The stock has delivered more than 30% with in a short span of time.

Suzlon Energy Ltd the world's fourth largest wind turbine maker plans to invest about Rs 5600 cr to triple its production capacity by 2009. The expansion would raise Suzlon's turbine production capacity in India to 5,700 megawatt (MW) by March 2009 from 2,700 MW now. It recently acquired subsidiary Germany's REpower Systems would have increased its capacity to 1,200 MW from an existing 700 MW. The total investment in this three year plan is about Rs 5600 cr and most of this investment would be financed by debt. The company also plans to raise its capacity to produce wind gearboxes, made by its unlisted Belgian subsidiary Hansen Transmissions to 9,300 MW by 2009. The company's order book stands at around Rs 14000 cr up from Rs 13200 cr in July with most orders for exports. It also informed that in June it might seek a listing in London or Frankfurt in the next 12-24 months. The expansion plans are aggressive and certainly impressive.. But the valuations certainly leave a lot to be desired. The acquisition of RE power was not an attractive one financially and that we believe could impact earnings The stock closed up by 3.27%.

We had a note on Bharat Fertiliser. This is after many months of waiting for the company to announce its real estate projects. The value of the property itself is couple of times the market cap. But what is more and what are the risk factors is something which will be known only on reading the note.

Technically Speaking: It was a ranged session for the whole day before closing. Sensex touched an intraday high of 15650 and low of 15548. Overall breadth was in favor of Advances, where the Advances stood at 1647, while Declines at 1123. The turnover was good at Rs 5257 cr. Sensex is facing resistance at 15700 but we believe it is just a matter of time before we cross it and move towards our target of 16100. On the lower side supports at 15490 and 15350.

Market ends firm, gains 109 points

The market was back on track after displaying subdued trend for last couple of sessions. The market remained firm for almost the entire trading session, above the 15,600 level. The Sensex began the day 43 points above its previous close at 15,548 and moved up to touch an intra-day high of 15,650 on substantial buying support in heavyweight, auto and banking stocks. The index also received major support from Maruti Udyog, SBI and ACC, which gained around 2-3% today. The Sensex finally wrapped up the session with a gain of 109 points at 15,614, while the Nifty closed with a gain of 32 points at 4,529.

The breadth of the market was positive. Of the 2,748 stocks traded on the BSE, 1,574 stocks advanced, 1,110 stocks declined and 64 stocks ended unchanged. Among the sectoral indices, the BSE Realty index moved up by 2.69% followed by the BSE Auto index (up 1.30%), the BSE Bankex index (up 1.28%) and the BSE PSU index (up 1%). However, the BSE FMCG index closed in negative territory.

Among the heavyweights, Maruti Udyog gained 3.72% at Rs891, SBI soared 3.18% at Rs1,676, ACC surged 2.45% at Rs1,129, HDFC Bank moved up by 2.42% at Rs1,210, Grasim scaled up 1.88% at Rs3,264, Ambuja Cement was up 1.80% at Rs144 and HDFC advanced by 1.61% at Rs2,209. Reliance Communication gained 1.56% at Rs551, Tata Motors advanced by 1.35% at Rs695 and TCS moved up by 1.34% at Rs1,030. However, HLL, Hindalco, Dr Reddy's Lab, Tata Steel, ITC, Reliance Energy, Bharti Airtel, Cipla and ICICI Bank closed with moderate losses.

Over 2.13 crore Vishal Exports shares changed hands on the BSE followed by IFCI (1.59 crore shares), Reliance Natural Resources (1.06 crore shares), IKF Technologies (1.01 crore shares) and Ispat Industries (87.34 lakh shares).

Value wise, Reliance Capital registered a turnover of Rs177 crore on the BSE followed by IFCI (Rs124 crore), Reliance Industries (Rs124 crore), MIC Electronics (Rs115 crore) and Welspun Gujarat (Rs107 crore).

Post Market Commentary

The markets closed on positive note as BSE Sensex closed higher by 109.08 points at 15,614.44 and the Nifty closed higher by 32.1 points at 4,528.95. The BSE mid cap and Small cap closed higher by 57.15 points and 65.91 points at 6,946.70 and 8,638.26 respectively. The market breadth was strong with 1,576 stocks advanced and 1115 stocks declined.

BSE bankex index surged by 102.17 points to close at 8,081.94 as Kotak bank (3.31%), SBI (3.18%), HDFCbank (2.87%), Union bank (2.08%), Axis bank (1.96%), PNB (1.82%) closed higher.

BSE oil & gas index grew by 57.62 points to close at 8,378.77 as GAIL (1.15%), ONGC (0.94%), Reliance industries (0.67%), BPCL (0.50%) and RPL (0.38%) closed higher.

BSE Auto Index grew by 63.56 points to close at 4,939.34 as Maruti Udyog (3.82%), TVS (3.23%), Hero Honda (1.67%), Tata Motors (1.35%), M&M (1.33%) and Bajaj auto (1%) closed in green.

BSE Capital goods index grew by 59.70 points to close at 13,723.88 as Suzlon energy (3.61%), Praj industries (3.06%), BEML (1.92%), Alfa laval (1.36%) and Alstom (1.26%) and L&T (0.14%) closed higher.

BSE IT index increased by 38.59 points to close at 4,482.57 as Mphasis (2.96%), Tech Mahindra (2.17%), TCS (1.34%), Satyam (1.25%), Wipro (1.07%) and Infosys (0.77%) closed in red.

BSE Health Care Index closed higher by 9.32 points at 3,693.88 as Lupin ltd (2.73%), Nicholas piramal (1.43%), Glennmark (0.55%), Sun pharma (0.24%) and Wokhardt (0.18%) closed in positive.

BSE Metal index increased marginally by 6.35 points to close at 11,924.63 as Jindal steel (7.55%), Welspun Gujarat (6.84%), sterlite industries (0.46%) closed in green while SAIL (0.95%), Hindalco (0.81%), Tata Steel (0.66%) and Nalco (0.50%) closed in red.

BSE FMCG index dropped by 11.14 points to close at 2,070.79 as United breweries (3.48%), Colgate Palmolive (1.26%), HUL (0.97%) and ITC (0.53%) closed in red.

Ajanta Pharma to sell Revanesse in India

Ajanta Pharma has entered into an in agreement with Prollenium Medical Technologies, Canada to market its highly successful Dermal Filler 'Revanesse' in India. The company is well established in therapeutic segments like dermatology, cardiology, and ophthalmology with many first to market brands in India. Launch of Revanesse will put the company as a front runner in the aesthetic segment in India and will further boost its corporate equity amongst cosmetologists and dermatologists.

Ajanta Pharma has jumped 6.67% at Rs107 on volumes over 97,000 shares on the BSE.

Sensex gains 115 points

The market today broke its two day loosing streak to post good gains, led by steady buying support for index pivotals. Turnover was high. Asian markets were mixed while European markets were trading lower today, 13 September 2007.

The BSE 30-share Sensex gained 115.31 points or 0.74% to 15,620.27, as per provisional closing. It opened higher at 15,547.66 and advanced further to hit a high of 15,650.14. The Sensex had hit an all time high of 15,868.85 on 24 July 2007

The S&P CNX Nifty was up 33 points or 0.73% to 4,529.85 as per provisional closing

The market breadth was strong on BSE, with 1647 shares advancing as compared to 1123 that declined, while 66 remained unchanged.

As per provisional closing, the BSE Mid-Cap index rose 0.86% to 6,948.53, while the BSE Small-Cap index gained 0.77% to 8,638.20. Both these indices outperformed the Sensex by small margin

The BSE Mid-Cap index hit an all time high of 6,958.98, while the BSE Small-Cap index struck an all time high of 8,670.25 in intra-day trade today, 13 September 2007.

The total turnover on BSE crossed the Rs 5,000 crore and was healthy. It amounted to Rs 5257 crore as compared to Rs 4115 crore by 14:30 IST

From 30-member Sensex pack, 20 gained while the rest slipped.

India’s top small car manufacturer in terms market share Maruti Suzuki India surged 3.73% to Rs 891.30 on 1.94 lakh shares. It was the top gainer from the Sensex pack.

Other auto shares also posted gains, on fresh buying. Tata Motors (up 1.29% to Rs 694.20), Mahindra & Mahindra (up 1.33% to Rs 707.95), and Bajaj Auto (up 1.06% to Rs 2418.10), gained.

State Bank of India (SBI), the nation’s largest bank in terms of net profit gained 3.25% to Rs 1677 on 6.31 lakh shares. As per reports, SBI plans to raise Rs 10,000 crore by December 2007.

India’s largest private sector company by market capitalisation and oil refiner Reliance Industries (RIL) struck an all time high of Rs 2034.40 in early trade. It settled 0.6% higher to Rs 2025 on 6.15 lakh shares. The stock edged higher after the empowered group of ministers (EGoM), approved RIL’s pricing formula for its gas from the Krishna-Godavari (KG) basin.

The revised formula lowers the proposed price of the gas at Kakinada to $4.20 per million British thermal unit (mmBtu) from $4.33 mmBtu that was proposed by RIL. The price at which RIL will sell its gas from the KG basin to consumers will be valid for five years, after which it will be open for revision.

Reliance Communications, the county’s second largest listed cellular services provider in terms of revenue gained 1.86% to Rs 552.15. As per reports, FLAG Telecom Group (FLAG) reportedly bagged a contract from CERN, the European Organisation for Nuclear Research, to provide Gigabit connectivity between the organisation’s research centre in Geneva and Tata Institute of Fundamental Research in Mumbai.

IT pivotals staged a comeback after their recent underperformance to the Sensex. Satyam Computers (up 1.27% to Rs 434.25), Infosys Technologies (up 0.71% to Rs 1833), Wipro (up 1.19% to Rs 458), and TCS (up 1.36% to Rs 1030), posted gains. The government on Wednesday, 12 September 2007 extended the date for corporates to submit Fringe Benefit Tax on employee stock option plans to 15 December 2007 in the absence of the method for determining the fair market value of such shares.

India’s largest FMCG company by sales Hindustan Unilever was the top loser from the Sensex pack. It slipped 0.97% to Rs 215 on high volumes of 17.13 lakh shares. A block deal of 5.08 lakh shares was struck on the counter on BSE at Rs 216.05 per share by 14:38 IST. The stock recovered from its day’s low of Rs 212.70

Tata Steel (down 0.67% to Rs 706.50), and Reliance Energy (down 0.82% to Rs 887), were the other losers from Sensex pack.

Reliance Capital was the top traded counter on BSE with total turnover of Rs 177.56 crore followed by Reliance Industries (Rs 124.71 crore), IFCI (Rs 124.01 crore), MIC Electronics (Rs 115.17 crore) and Welspun Gujarat Stahl Rhoren (Rs 107.11 crore).

Most of the European markets were trading lower. United Kingdom (down 0.25% to 6,290.20), France (down 0.42% to 5,484.81), and Germany (down 0.47% to 7,437.62), declined.

Asian markets were mixed. Japan's Nikkei (up 0.15% at 15,836.27), Hang Seng (up 0.93% at 24,537.07), Seoul Composite (up 1.90% to 1,848.02), and Shanghai Composite (up 1.95% to 5,273.92) gained.

However, Taiwan Weighted (down 1.01% at 8,927.42) and Straits Times (down 0.05% to 3,504.40) slipped

US shares settled slightly lower yesterday, 12 September 2007 with investors still confident the Federal Reserve will lower rates next week but treading cautiously as oil prices crossed $80 a barrel for the first time and the dollar extended its decline. The Dow Jones industrial average fell 16.74 points, or 0.13%, to 13,291.65, after weaving in and out of positive territory throughout the session. The Standard & Poor's 500 index rose 0.07 point, or less than 0.01%, to 1,471.56, and the Nasdaq Composite index fell 5.40 points, or 0.21%, to 2,592.07.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 317.76 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 91.32 crore on Wednesday, 12 September 2007.

India's industrial output rose 7.1% in July 2007 from a year earlier, sharply lower than downwardly revised annual growth of 9% in June 2007 due to slower manufacturing output, data showed on Wednesday, 12 September 2007. Manufacturing production rose 7.2% in July 2007 from a year earlier, compared with provisional annual growth of 10.6% in June 2007.

Crude oil prices dipped on Thursday, 13 September 2007, but held near $80 a barrel and the previous day's record high, as dealers watched a tropical storm in the Gulf of Mexico after a sharp fall in U.S. crude stocks. US crude was trading 23 cents lower at $79.68 a barrel, after hitting a record high of $80.18 yesterday, 12 September 2007. London Brent crude shed 9 cents to $77.59 a barrel.

Khadim India IPO

To offer 55 lakh shares via issue

Footwear retailer Khadim India will come out with an initial public offer of 55 lakh shares to set up a new central distribution centre, retail stores and improve infrastructure. The company is likely to do a pre-IPO placement.

The company plans to spend about Rs 31.4 crore on exclusive footwear retail stores, Rs 42.43 crore on lifestyle retail stores and Rs 9.06 crore on its distribution centre.

Khadim reported net profit of Rs 2.9 crore on sales of Rs 149 crore in the year ended March 2007.

India is SMS Crazy

With an average 1.5 billion SMSes generated nationally every week, the Indian SMS saga is already the stuff of legend. If anything, the marriage of reality TV shows and mobile telephony now promises to set the national SMS turf on fire. Check this out — an 11-hour voting window (between 9 pm and 8 am) during last Friday’s Gala Round in Sony Entertainment TV India’s popular Indian Idol 3 music contest raked in well over three million SMSes from across India and key overseas locations like London, Dubai and Singapore. This was confirmed by a senior SET India official.

But here’s the juicy bit. The unofficial number doing the rounds is that at least five million votes hit Sony’s SMS gateway. Neither SET India nor the mobile guys are willing to confirm this. But at a flat Rs 3 per message, the SMS revenue alone during that 11-hour voting slot would work out to a cool Rs 1.5 crore. Add to that revenues from a few million voice message votes at Rs 6 each which also hit home. SET India circles confirmed that “bulk of the SMS traffic stemmed from Hutch and Airtel networks”.

Top honchos at SET India are truly gung-ho. “The total SMS-driven voting levels during the September 7 Gala episode itself was far in excess of three million. And these SMS votes came in just 11-hour voting window. Now that we’re down to the wire and people have to make a choice between the two finalists, Amit Paul and Prashant Tamang, I anticipate SMS-based voting to be 8-to-10 times the three million-plus SMS levels scaled last Friday. This is since the voting will be spread over two weeks till the Grand Finale on September 23,” said Mr Albert Almeida, who is executive vice-president and business head at SET India.

ET also spoke to a cross-section of the mobile flock, including Hutch, Airtel and BSNL, to get a fix on the real SMS impact of Indian Idol 3. While there’s a tight lid on all Indian Idol-related SMS numbers, leading mobile operators confirmed that SMS volumes were huge. It’s a different matter that SMS data trickling in from mobile operators tended to be more conservative than SET India’s projections.

Even as Indian Idol 3 hits the final stage, mobility circles expect voting lines to nationally generate five million SMSes in the final stretch from September 14-to-23 which will see several face-offs between the two finalists — Shillong’s Amit Paul and city cop, Prashant Tamang. For instance, a director at one of the country’s biggest cellular service providers said: “The two-and-a-half month long Indian Idol 3 context is likely to generate a shade over 15 million SMSes nationally, which is huge for a single TV show, but merely a drop in India’s SMS ocean, given that the national mobile market generates over 1.5 billion SMSes every week. In ARPU (average revenue per user) terms the increase will be a tiny 10 paise in gross revenue terms for mobile operators.”

Bernanke seeks data to fix the mess

Alan Greenspan trusted his instincts. Ben Bernanke trusts the MAQS.

For the past several days, the MAQS - a group of analysts in the Federal Reserve's Macroeconomic and Quantitative Studies unit -- have run a series of what-if scenarios on the US economy that will play a critical role in next week's interest-rate decision, according to a report on the website of Bloomberg.

"The simulations will supplement the forecast handed to policy makers at the start of their September 18 meeting, and may determine the size of the rate cut almost universally predicted by Wall Street economists," the report said.

Bernanke has championed the team's work since becoming Fed chairman in 2006 because he wants to sift through models, projections and anecdotes before coming to conclusions. His approach contrasts with that of predecessor Alan Greenspan who relied more on his own reading of conditions, and as a result probably would have cut rates to insure against a recession long before the Federal Open Market Committee (FOMC) gathering.

The FOMC will next week lower the overnight lending rate between banks to 5% from 5.25%, according to the median forecast of economists surveyed by Bloomberg. The reduction would be Bernanke's first and may be followed by at least two more before year-end, the report said.

Indian IT firms planning to outsource

Indian IT firms that thrived on the outsourcing boom in the West are themselves headed offshore, from Malaysia to Mexico, to escape the double sting of surging salaries and a rising rupee.
Tata Consultancy, Infosys, Wipro, Satyam and smaller companies are stepping up acquisitions and opening more facilities closer to US and European clients to cut costs -- the reason why work was farmed out to India in the first place.
Salaries of software professionals rose 18.7% in 2007, a survey showed today, while the rupee has gained almost 10% this year to near 10-year highs against the dollar.
That’s eroding the cost advantage once enjoyed by the $50 billion information technology industry, which bills two-thirds of sales in dollars but whose expenses are almost all incurred in rupees.
IT firms are “off-shoring” work to time zones and locations nearer their clients in a reversal of the trend that made Bangalore, India’s Silicon Valley, the favourite back-office of the world’s biggest companies.
Bangalore also gave the English language a new slang verb: being “bangalored” in the US meant a person had lost his job because it had been handed to an IT company in India that would do it for a fraction of the cost.
The term looks set to lose its pejorative punch as the same IT industry, which employs 1.63 million people at home, creates and sustains thousands of jobs abroad.
This week Wipro opened a facility in the Mexican city of Monterrey to service American and European clients and Satyam launched a software centre in MSC Malaysia, a government-designated high-tech zone.
“In the past, we viewed off-shoring as India-centric, but we do not do it any more,” said Satyam founder B. Ramalinga Raju, who on Monday opened the centre to support business in the US, Southeast Asia and the Middle East.
“We look at off-shoring as delivering through high-quality workforce in lower-cost countries,” he said.
Hyderabad-based Satyam has hired 300 mostly-Malaysian IT engineers to man the facility, whose workforce will rise to 2,000 in four years to cater to clients such as GlaxoSmithKline, one of its top 10 customers.
Malaysia was chosen because of its “competitive cost environment,” said Raju, whose company is distributing work to locations where “it makes the most business sense.”
Wipro will add to the 100 employees it hired in Mexico and invest in other lower-cost locations, said chairman Azim Premji, who in August paid $600 million to buy US-based outsourcing firm Infocrossing to serve American clients.
Mumbai-based Tata Consultancy, India’s top software maker, opened a centre in the Mexican city of Guadalajara with 500 employees and said it will employ “thousands more” in the next five years.
Mexico shares a similar time zone with and is within five hours flying distance from anywhere in the US, enabling TCS to provide “nearshore services” to clients, the company said.
Infosys Technologies opened a 400-person facility in the Czech Republic to service European clients and purchased the service centres of Royal Philips in Poland and Thailand besides India. It’s also weighing potential acquisitions.
At home, wage bills are rising as Indian firms compete with multinationals to hire and keep scarce software talent.
The IT industry’s average annual salary rose 11 % this year to Rs620,000 (15,320 dollars), said a survey by the market-research firm IDC India for Dataquest magazine, a considerable amount in a country where the per capita income is less than $900.
“Indian tech companies must find a way out of this ever increasing wage rise as rupee appreciation squeezes their margins further,” said the industry survey.
The rupee is rising on inflows of billions of dollars into an economy growing 9% a year.
But costs alone are not driving the “dispersal of the IT industry around the globe,” said Kiran Karnik, president of the industry grouping National Association of Software and Service Companies, or Nasscom.
“Cost optimization is just one reason,” he said. “Proximity to clients is also important, both geographically and culturally. If you want to serve clients in the US or Spanish-speaking Latin America, it makes sense to be in Mexico.”

India Focused Hedge Funds

India Focused Hedge Funds

TN Petro

TN Petro

Poll Results - Investing in Power Grid IPO?

YES !! - 452 votes - 80%

No Way! - 62 votes - 11%

Maybe - 48 votes - 8%

TOTAL Number of VOTES - 562 votes

HDFC Equity exits TCS and Wipro, adds Suzlon

Country's largest equity fund, HDFC Equity Fund, exited software firms Tata Consultancy Services and Wipro in August as part of a strategy to cut exposure to the sector, data from fund tracker ICRA Online Ltd showed.

The HDFC Equity Fund had allocated more than a fifth of its assets to tech stocks at the end of December, but has cut exposure consistently since then.

The fund held 5.57 per cent of its Rs 4,656 crore assets in two tech stocks - Infosys Technologies and CMC - at August-end.

Many Indian funds have been reducing stakes in tech firms on concern a strong rupee, that has risen more than 9 per cent against the dollar in 2007, and the turmoil in the US subprime mortgage sector would hurt profits of the export dependent companies.

The BSE IT Index has fallen nearly 16 percent this year against about 12 per cent rise of the benchmark BSE index.

In a Reuters poll of 11 Indian fund houses between Aug 20-23, nearly 64 per cent of the respondents were planning to maintain or cut exposure to the battered sector in the next three months.

The fund, up 18 per cent in 2007, also exited Shoppers Stop, Sun Pharma Advanced Research, and DLF, and cut down on building and metal stocks in August.


It increased exposure to basic engineering to almost a fourth at August-end, ICRA data showed, adding wind turbine maker Suzlon Energy.

In line with other diversified equity funds, HDFC has raised exposure to the sector in 2007 to 24.15 per cent at August-end from 16.27 per cent in December.

Three of its top-five holdings are basic engineering stocks. It added realty firm Puravankara Projects and raised exposure to July entrant and top cigarette maker ITC in August.

Record crude price weighs on US Market

$80 crude and poor guidance from Texas Instrument push stocks down

US stocks closed down today, Wednesday, 12 September, 2007. Crude prices kissing the $80/barrel took a toll on the broader market sentiments. Energy Department reporting higher than expected drawdown in crude inventory was the main reason for crude prices going higher.

Higher energy prices however helped the energy stocks. But Technology and Financials were disappointing sectors. A disappointing guidance from Texas Instruments made the market sentiment further worse.

The Dow Jones industrial Average closed lower by 16.74 points at 13,291.65. The Nasdaq Composite Index, finished lower by 5.4 points at 2,592.07. S&P 500 finished marginally higher by 0.07 points at 1,471.56.

Twelve out of thirty Dow stocks ended in red today. Mc Donalds, IBM, Caterpillar, H-P and Alcoa led the group of Dow laggards. 3M, Boeing, Exxon Mobil, CoCo Cola, and Altria featured among the eighteen winners.

Texas Instruments shares today slipped by 1.7% after the company tightened its third quarter forecasts. Yesterday, after market’s close, Texas Instrument said that it now expects third-quarter sales of $3.56 billion to $3.72 billion. The company's previous outlook forecast sales of $3.49 billion to $3.79 billion.

Nasdaq tries to get a boost from Cardica

Stocks moved in positive and negative territory for almost the entire day today. But rising oil price and sinking dollar made it a roller coaster ride for the indices.

The Nasdaq got some strength from medical-device maker Cardica which got a key European approval for a gadget that connects blood vessels during heart bypass surgery. Shares of Cardica were almost 17% up.

On the top of the hour, a Mortgage Bankers Association survey showed that as rates fell in the week ended Friday, 7 September, mortgage application volume rose 5.5%, refinance volume jumped 6%, and the purchase index increased 5.2%, adjusted for the Labor Day holiday.

Indian ADRs closed mixed today. Infosys, Tata Motors, HDFC Bank and MTNL were the only ADRs who managed to post marginal gains today.

Crude ends at an all time high

Crude oil future prices rose today and reached an all time new high. Crude prices crossed $80/barrel and touched $80.18/bbl during intra day trading. Prices increased today after Energy Department’s weekly inventory report showed that crude supplies dropped more than 7 million barrels and motor gasoline inventories fell a sixth week in a row.

Market was expecting a drawdown around 2.5 million barrels. Crude-oil futures for light sweet crude for October delivery closed at $79.91/barrel (higher by $1.68/barrel or 2.15%) on the New York Mercantile Exchange. Heating oil prices closed at an all time high and natural gas prices closed at a seven month high.

Nearly 1.3 billion shares were exchanged at the New York Stock Exchange, and declining stocks ahead of advancing issues 9 to 7. At the Nasdaq, 1.9 billion shares exchanged hands, and declining issues topped those advancing by a count of 3 to 1.

For tomorrow, there will be a few economic reports to dictate market momentum. The day opens with the weekly Jobless Claims report, which should provide the latest labor market data. The Energy Information Administration will issue its weekly data on natural gas reserves at 10.30 A.M. During the afternoon, the federal government will be issuing the Treasury Budget which is an indicator of Treasury financing.

US Market Update

Wednesday, the US stock markets closed flat with investors still confident of an interest-rate cut by the Federal Reserve in the next week, but the crude oil topped $80 a barrel and a reduced forecast of the third quarter from Texas Instruments Inc., the world''s largest maker of cell-phone chips has led the investors to book profits in the market.

The Dow Jones Industrial Average (DJIA) dropped 16.74 points to close at 13,291.65. The S&P 500 (SPX) index increased marginally by 0.07 points to close at 1,471.56 and the NASDAQ Composite (RIXF) fell 5.40 points to close at 2,592.07.Among the Dow''s 30 components, 12 components closed in negative territory while the remaining closed in positive territory.

A total of 1.9bn shares were traded on the NASDAQ, while declines outpaced the advances by 3 to 1. On NYSE around 1.3bn shares traded for the day, with declines outpaced the advances by 9 to 7.

Crude oil prices closed at $79.91per barrel higher by $1.68 in NYME. Crude oil prices crude oil for October delivery touched $80 a barrel for the first time ever. That spike was driven by the government''s report that oil inventories fell in the latest week of reporting by 7.01 million barrels. Analysts had been expecting a drawdown of only 2.7 million barrels.

Technicals - Sep 13 2007

Technicals - Sep 13 2007

Trading Calls


Stocks with +ve bias: Reliance Inds, Sesa Goa, Tisco, Unitech

Stocks with short-term delivery: United Phoshorus, Cummins, GNFC

Stocks for Investments: TV18, Madras Cement, Infosys

Pre Open Market Commentary

Indian market is likely to have a positive opening as the Asian market is trading higher. On Wednesday, the Indian markets ended on a negative note, as BSE Sensex closed lower by 37.41 points at 15,505.36 while Nifty closed flat at 4,496.85. We expect the market to remain range bound during the trading session.

On Wednesday, the US market closed in negative. The Dow Jones Industrial Average slipped by 16.74 points to close at 13,291.65. The Nasdaq Composite Index decreased by 5.40 points to close at 2,592.07. The S&P 500 index closed flat at 1,471.56.

Indian ADRs ended in mixed. In technology sector, Satyam computers fell by (1.53%) along with Patni computers by (0.45%) and Wipro by (0.22%) respectively while Infosys grew by (0.66%). In banking sector, HDFC bank grew by (0.51%) while ICICI bank slipped by (1.28%). VSNL and MTNL grew by (3.37%) and (0.43%) respectively.

The major stock markets in Asia are trading higher. Japan''s Nikkei trading up by 61.49 points to trade at 15,859.09. Hang Seng grew by 209.48 points to trade at 24,519.62. Singapore Strait times trading higher by 6.42 points at 3,512.51. South Korea,s Seoul composite is trading flat at 1,814.96.

Today, Nifty has support at 4,460 and resistance at 4,558 and BSE Sensex has support at 15,325 and resistance at 15,690.

Morning Call - Sep 13 2007

Market Grape Wine :

In House :

Nifty at a supp of 4485 and 4458 levels with resistance at 4532 and 4552 levels.

Intraday : Buy Educomp above 2973 target 3080 with S /L 2948

Intraday : Buy ultratech above 995 target 1030 with S/L 982.

F & O : Intraday : Buy GNFC above 146.50 target 154 with S /L 144.

F & O : Intraday : Sell Centex below 793 target 778 with S/L 800.

Out House :

Markets at a support of 15243 & 15353 levels with resistance at 15678 & 15786 levels .

Buy : REL & RPL

Buy : RIL & Tisco bullet

Buy : IFCI , TTML , TFCI & NagarFert

Buy : Hanun ,& Kajaria

Buy : HOCL bullet

Buy : IolBroad

Buy : NTPC

Buy : Welsguj & Gitanjali & Aban

Dark Horse : RIL , Kotak , Kajaria , HOCL , IFCI , Hanun & Sintex

Bias may remain cautious

After yesterday's flat close the market is likely to extend this trend in today's trades also. The negative to flat close in US markets and subdued Asian markets in current trades may weigh on investor sentiment. On the upside, the Nifty could test around the 4450 level and on breaching this level it may witness support around the 4410 level. The Sensex has a likely support at 15250 and may test higher levels of 15700.

US indices slipped on Wednesday, after a volatile session on the back of rising oil prices and falling U.S. dollar ahead of next week's Federal Reserve policy meeting. While the Dow Jones slipped 17 points at 13292, the Nasdaq was down five points at 2592.

Indian floats, also, bucked the weak US market trend and ended lower. Satyam Computer, ICICI Bank and Rediff lost over 1% each, while Wipro, Dr Reddy's, VSNL, & Patni computer also lost below 0.50% each, Infosya, Tata Motors, HDFC Bank and MTNL however, were the only gainers amongst the ADRs and gained around 0.50% to 1% respectively.

Global crude oil prices touched the record high of $80 on Wednesday, with the Nymex light crude oil for October series closed at $79.91 up $1.68 per barrel.

Grey Market - Consolidated Construction, Kouton, Power Grid

Consolidated Construction 460 to 510 60 to 65

Koutons Retail 370 to 415 100 to 105

Power Grid Corporation 44 to 52 15.5 to 16

Dhanus Techologies 280 to 295 110 to 115

Allied Computer 12 0

Kaveri Seeds 150 to 170 12 to 15

Indowind Energy 55 to 65 Discount

Magnum Venture 30 2 to 3

Reliance Industries, ONGC, Satyam

Reliance Industries, ONGC, Satyam

Market to stay sideways

The market is expected to stay sideways in absence of any positive triggers. Asian markets were trading on a mixed note today, 13 September 2007. Japan's Nikkei (up 0.39% at 15,859.09), Hang Seng (up 0.86% at 24,519.62) and Singapore's Straits Times (up 0.18% at 3,512.51), gained.

However, Taiwan Weighted (down 0.62% at 8,961.88) and South Korea's Seoul Composite (down 0.05% to 1,812.70) slipped.

US shares settled slightly lower yesterday, 12 September 2007 with investors still confident the Federal Reserve will lower rates next week but treading cautiously as oil prices crossed $80 a barrel for the first time and the dollar extended its decline. The Dow Jones industrial average fell 16.74 points, or 0.13%, to 13,291.65, after weaving in and out of positive territory throughout the session. The Standard & Poor's 500 index rose 0.07 point, or less than 0.01%, to 1,471.56, and the Nasdaq Composite index fell 5.40 points, or 0.21%, to 2,592.07.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 317.76 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 91.32 crore on Wednesday, 12 September 2007.

India's industrial output rose 7.1% in July 2007 from a year earlier, sharply lower than downwardly revised annual growth of 9% in June 2007 due to slower manufacturing output, data showed on Wednesday, 12 September 2007. Manufacturing production rose 7.2% in July 2007 from a year earlier, compared with provisional annual growth of 10.6% in June 2007.

Crude oil prices dipped on Thursday, 13 September 2007, but held near $80 a barrel and the previous day's record high, as dealers watched a tropical storm in the Gulf of Mexico after a sharp fall in U.S. crude stocks. US crude was trading 23 cents lower at $79.68 a barrel, after hitting a record high of $80.18 yesterday, 12 September 2007. London Brent crude shed 9 cents to $77.59 a barrel.

The BSE 30-share Sensex declined 37.41 points or 0.24% at 15,505.36, on Wednesday, 12 September 2007. The barometer index is 363.49 points away from its all time high of 15,868.85 hit on 24 July 2007.

The S&P CNX Nifty was down 0.80 points or 0.02% at 4,496.15, on Wednesday, 12 September 2007.

Trading Calls

Nifty (4497) Supp 4476 Res 4524

Buy India Cements (266) SL 262 Target 274, 277

Buy GNFC (144) SL 141
Target 150, 151

Buy Peninsula Land (535) SL 530
Target 544, 547

Sell IPCL (397) SL 402
Target 389, 386

Sell Dr Reddy's (646) SL 652
Target 637, 633

Two steps backward, one step forward

There are two ways to slide easily through life; to believe everything or to doubt everything. Both ways save us from thinking.

Investors can’t help but think what lies ahead and would like to believe that a steep drop in industrial growth for the month of July is more of an aberration rather a trend. Expect the key indices to be rangebound in the next few days. Be selective in stock picking and avoid aggressive purchases. After two straight days of declines, we expect a flat open and maybe the bulls may stretch themselves in the green by the end of the day.

An indecisive trend in Asia and anxiety ahead of next week's Federal Reserve meeting kept the bulls from advancing on Thursday. Trading activity has slowed considerably this week as investors are not ready to take more risks at this point in time. Though FII inflows are continuing unabated the interest from other categories of investors, mainly retail, has ebbed on account of the spike in volatility. Global trends have taken precedent to local developments off late. The same is expected to continue for a while till the US economy pulls itself out of the current turmoil, fueled by the slump in the housing sector. Its a tall order, but the Fed may just be able to engineer a soft landing for the world's largest economy.

Optimistically thinking, there's nothing to worry about, as the impact may be muted in emerging markets such as India. After a slowdown in industrial growth in July things should improve in the coming months though some moderation is imminent due to the aggressive monetary tightening by the RBI and partly due to the base effect. The political turmoil could have a temporary effect on the sentiment but overall outlook remains strong over the medium to long term.

US stocks fell marginally on Wednesday after a volatile session. Record high oil prices and a falling US dollar cast a shadow on Wall Street ahead of next week's much-awaited Federal Reserve policy meeting.

Technology shares were down after Texas Instruments slashed its sales forecast. Office Depot fell to a two-year low after analysts cut earnings estimates.

The Dow Jones Industrial Average declined for the first time in three days, losing 16.74 points, or 0.1%, to 13,291.65. The Standard & Poor's 500 Index finished flat at 1,471.56, helped by a rally in energy shares after oil climbed to a record. The Nasdaq Composite Index lost 5.4 points, or 0.2%, to 2,592.07.

About three stocks dropped for every two that rose on the New York Stock Exchange.

Crude oil hit a new record high in New York, crossing $80 per barrel for the first time ever, after the government said crude supplies fell far more than expected.

US light crude for October delivery set a trading high of $80.18 late in the session before pulling back slightly to settle at $79.91 a barrel, still up $1.68 a barrel and another record close. The old trading high was $78.77 a barrel hit Aug. 1. Oil prices are down about 30% in 2007.

Treasury prices fell, raising the yield on the 10-year note to 4.41% from 4.37% late on Tuesday. In currency trading, the dollar fell to a record low versus the euro and was little changed against the yen. COMEX gold for December delivery fell 40 cents to settle at $720.70 an ounce.

Treasury Secretary Henry Paulson said the recent market turbulence has not been caused by problems in the real economy, but because of bad lending practices. He also said that problems with subprime mortgages will take longer to correct than those in other financial markets.

European stocks ended with small gains after a choppy session. The pan-European Dow Jones Stoxx 600 index, which was down for most of the session, closed with a rise of 0.2% at 369.21. The UK's FTSE 100 rose 0.4% to 6,306.20 and the German DAX 30 advanced 0.2% to 7,472.99. The French CAC 40 ended 0.5% higher at 5,508.01.

Latin American stocks closed lower. The Bovespa, Brazil's benchmark stock index, slipped 0.1% to 53,868.88. Mexico's IPC fell 0.4% to 30.079.87. The benchmark IPSA index in Chile fell 1.3% to 3,113.49 and Argentina's Merval dropped 0.3% to 2,013.07.

In other emerging markets, the RTS index in Russia was down 0.6% at 1899 while the ISE National-30 index in Turkey closed nearly flat at 61,932.

Asian markets were trading mixed this morning. The Nikkei in Tokyo was up 61 points at 15,859 while the Hang Seng in Hong Kong rose 80 points to 24,390. The Kospi in Seoul was flat at 1812 and the Straits Times in Singapore too was nearly unchanged at 3507.

In yet another dull trading session, markets swung between green and red before closing a tad lower. Bulls failed to carry on the momentum after a positive start as they struggled to find any clear direction as government report showed industrial production in July grew at the slowest pace in nine months. Volumes were almost flat, turnover in cash segment was marginally down by 0.19% and in F&O segment was down by 2.8%. Finally, the 30-share Sensex closed lower by 37 points at 15505 and NSE Nifty closed flat at 4497.

SBI marginally gained 0.2% to Rs1624 after the company announced that their plan to raise Rs100bn and would sell shares by December. The scrip touched an intra-day high of Rs1639 and a low of Rs1619 and recorded volumes of over 6,00,000 shares on NSE.

Tata Steel gained by 0.5% to Rs711 following media reports that the company is planning to set up 5mn tons steel plant in South Africa. The scrip touched an intra-day high of Rs717 and a low of Rs712 and recorded volumes of over 10,00,000 shares on NSE.

Alchemist was locked at 5% upper circuit to Rs96.20 after the company announced that they would acquire majority stake in Kaiser Hospital. The scrip touched an intra-day high of Rs96.20 and a low of Rs92.40 and recorded volumes of over 2,00,000 shares on NSE.

Kinetic Engineering spurred by over 3% to Rs142 as the company yesterday announced that they would be developing the gearbox for Tata’s Rs1 lakh car. The scrip touched an intra-day high of Rs157 and a low of Rs142 and recorded volumes of over 1,00,000 shares on NSE.

Essel Propack rallied by over 7% to Rs67 after reports stated that the Indian maker of laminated tubes and packaging plans to buy the packaging unit of Alcan Inc. The scrip has ouched an intra-day high of Rs69 and a low of Rs64 and recorded volumes of over 4,00,000 shares on NSE.

Reliance Industries edged higher by 1.5% to Rs2013 after reports stated that the world's largest polyester maker will pay $250mn to buy the assets of Hualon Corp. of Malaysia. The scrip touched an intra-day high of Rs2021 and a low of Rs1992 and recorded volumes of over 24,00,000 shares on NSE.

IDFC advanced by 1.4% to Rs134 as the RBI has increased the investment limit for FIIs in the companies. The scrip touched an intra-day high of Rs138 and a low of Rs133 and recorded volumes of over 57,00,000 shares on NSE.

Power stocks ended higher for a second day in a row. Suzlon gained by 1% to Rs1335, REL was up by 4% to Rs894, Tata Power advanced by 0.8% to Rs734 and CESC gained 1% to Rs473.

Pharma stocks were in poor health. Sun Pharma edged lower by 0.4% to Rs1006; Cipla was down by 1.4% to Rs174, Ranbaxy declined by 0.7% to Rs416 and Dr Reddy’s Lab edged lower by 0.5% to Rs647.

IT stocks were on the receiving end as rupee continued to strengthen against the USD. Satyam Computer slipped by 1.4% to Rs427, TCS was down by 1% to Rs1015, Rolta dropped by 4% to Rs480 and Mphasis declined by 3.2% to Rs282.

Realty stocks were in momentum. DLF gained by 2.7% to Rs635, Unitech advanced by 3% to Rs262 and Sobha was flat at Rs752.

Metal stocks continued to trade firm. Sterlite Industries gained by 2.3% to Rs624, Tata Steel gained by 0.5% to Rs711, JSW Steel advanced by 1.5% to Rs681 and Hindustan Zinc added 0.5% to Rs709.

Stocks In News

The EGoM approves gas pricing formula of RIL's KG Basin gas. The price is expected to be fixed at US$4.2/mmbtu vs US$4.33 at present.

SBI plans to raise Rs100bn through rights issue or a follow-on offer by December

ONGC is likely to increase its reserve estimates for its KG basin block.

Suzlon plans to invest about US$1.4bn to triple its production capacity by 2009.

Bombay Dyeing is likely to sell a little less than 15% stake to private equity players to fund its realty, retail and aviation businesses.

SAIL is planning to invest Rs490bn over the next three years to raise production
capacities and modernise mining work.

BPCL and Videocon have reportedly acquired a sizeable stake in Brazilian oil exploration
company, EnCanBrasil, a subsidiary of Canadian oil company Encana.

Lupin has won its patent challenge in US against King Pharmaceuticals and Sanofi-
Aventis for its blood pressure drug Altace.

Sun Pharma is likely to hike its bid price for acquisition of Israel's Taro.

Idea Cellular expects to announce a major organizational restructuring exercise.

COAI serves a legal notice to DoT for delay in allocation of spectrum to GSM players.

Gujarat Alkalies is investing Rs5bn in expanding capacities and setting up a captive power plant.

HDIL is setting up a Rs20bn IT park at Kalmassery near Kochi.

Fund Activity:

FIIs were net buyers of Rs3.18bn (provisional) in the cash segment on Wednesday and the local institutions pulled out Rs913.2mn. In the F&O segment, foreign funds were net buyers of Rs3.44bn.

On Tuesday, FIIs were net buyers to the tune of Rs4.46bn in the cash segment. Mutual Funds were net sellers of Rs1.79bn on the same day.

Major Bulk Deals:

Upper Circuit

Tanla, Marksans, Tourism Finance, Radha Madhav, Goldstone Tele, Gemini Communication, IID Forgings and Jai Corp.

Lower Circuit

Usher Agro

Almondz Global Securities moves

Almondz Global Securities had jumped 3.32% to Rs 87.20 at 12:04 IST on reports that the company may place 15% equity with prospective investors to raise funds for its expansion plans.

The BSE Sensex was up 10.44 points, or 0.07%, to 15553.21.

On BSE, 2.61 lakh shares of the scrip were traded. The stock had an average daily volume of 1.24 lakh shares on BSE in past one quarter.

The scrip had touched a high of Rs 89.75, all time high. It touched a low of Rs 84 so far during the day. The stock had hit a 52-week low of Rs 19.30 on 28 September 2006.

The scrip had outperformed the market in the one month to 11 September 2007, adding 20.06% as against the Sensex's 3.50% gain. It had also outperformed the market in the past three months, gaining 87.14% against the Sensex's 11% rise.

The small-cap merchant banker has an equity capital of Rs 9.60 crore. Face value per share is Rs 6.

At the current price of Rs 87.20, the scrip trades at a PE multiple of 15.43, based on Q1 June 2007 annualised EPS of Rs 5.65.

The company is reportedly in talks with private equity investors and the placement could be at a 10-15% premium to the current market price. Reportedly, the firm is planning to raise Rs 50-60 crore. The funds will be utilised for retail broking and margin funding.

As per reports, Almondz Group is currently in the process of merging the equity business of Almondz Capital Markets, a BSE member, with Almondz Global Securities (AGS). Shareholders of both the companies would meet separately to consider the proposal on 29 September 2007.

At the meeting held on 6 August 2007, the AGS board decided to make preferential allotment of 15,37,500 shares and warrants to promoters and other investors at Rs 80 including premium of Rs 74 per share, the report added.

AGS’ net profit rose 35.3% to Rs 2.26 crore on 64.8% rise in operating income to Rs 14.91 crore in Q1 June 2007 over Q1 June 2006.

Almondz Group provides a wide range of financial Services including merchant banking, infrastructure advisory, debt portfolio management, distribution of insurance products, equity and commodity broking.

Corporate Action Tracker

Corporate Action Tracker

Tata Motors

Tata Motors

Reliance Industries

Reliance Industries

Monthly Presentation

Monthly Presentation

Indian Households

Indian Households

Small, Midcap Construction Ideas

Small, Midcap Construction Ideas

Power Grid, Dr Reddy, Cipla, IDBI, Hindustan Unilever

Power Grid, Dr Reddy, Cipla, IDBI, Hindustan Unilever

Surya Pharma

Surya Pharma

Power Grid

Power Grid

Fed Rate - 25 or 50bps ?

Fed Rate - 25 or 50bps ?

Daily Technicals, Futures, Outlook - Sep 13 2007

Daily Technicals, Futures, Outlook - Sep 13 2007

Derivatives - Sep 13 2007

Derivatives - Sep 13 2007

Hot Picks

Tanla Solutions
CMP: Rs 482.65
Target price: Rs 706

HDFC Securities has initiated coverage on Tanla Solutions with a ‘buy’ recommendation on account of the company’s presence in the mobile transaction business. According to the brokerage, Tanla Solutions’ revenue is estimated to grow at a CAGR of 72% between FY07 and FY09. “Servicing content providers will help Tanla to catch up with the rapid technological changes in the content delivery business.

This is a major business for Tanla and helps it to get more content providers on its network,” says the report. Moreover, the company is expected to spend Rs 220 million in FY08 on R&D. “We believe that the company would grow at a CAGR of 59% in FY07-09E at net levels. This gives us a target price of Rs 706 for the stock --Rs 646 for the core business and Rs 60 for its non-core business (interest and dividend incomes),” said the brokerage in a note to its client.

Spice Comm
CMP: Rs 55
Target price: Rs 70

Citigroup has initiated coverage on Spice Communications with a ‘buy’ recommendation as the telecom entity is in the process of ramping up coverage in Punjab and Karnataka. “Moreover, we believe its suitability as an M&A target provides the icing on the cake,” adds the report. Access to 900 MHz and its small footprint make it an attractive and probably the only M&A candidate, explains the foreign brokerage. “New spectrum rules may dilute M&A prospects a bit, but on the flip side provides a chance to enter new circles, though constrained by size and management bandwidth,” it adds.

However, the report adds that while new circle rollouts are possible if new spectrum norms are accepted by the department of telecom (DoT), Spice will remain constrained by its balance sheet size as well as management bandwidth. Citigroup has set a 12-month price target at Rs 70 per share. Incidentally, the price target includes a 15% M&A premium. We believe that the scope for merger/acquisition between Spice and other telcos such as Idea, RCOM and Aircel still exists, says Citigroup.

Mindtree Consulting
CMP: Rs 582.75
Target price: Rs 556

Religare has initiated coverage on Mindtree Consulting with a ‘sell’ recommendation as it feels that operational risks are raising concerns and valuations are expensive. While Mindtree has been one of the fastest growing mid-tier Indian IT services company, growth has slowed down significantly in FY07 and is further expected to slow down in FY08 due to rupee appreciation, says the report.

“Risks to growth is significant as more than 65% of the revenues come from development projects which are highly dependant on the discretionary IT spend of clients. In the event of an economic slowdown in the US, discretionary IT spends would be curtailed,” adds the report. However, the report adds that the estimates do not factor in any large deals that the company might win that could fuel higher-than-expected earnings growth.

CMP: Rs 138.15
Target price: Rs 150

Angel Broking has recommended a ‘buy’ on Indian Overseas Bank with a 12-month price target of Rs 150. “IOB remains in a ‘sweet spot’ with its superior return ratios, consistently high net interest margins, better operating efficiency and higher leverage. Going ahead, with the government’s holding at 61%, IOB would be an active candidate in the consolidation process in the PSU banking space,” says the report. Meanwhile, the brokerage has valued the bank at a 10% discount to fair value to factor in its geographical concentration.

The report has also factored in positives like well-managed assets and liabilities to drive earnings, a significantly derisked investment book and strong operating performance. Further, IOB is well-placed on the capital adequacy ratio (CAR) front. “For FY07, the bank reported CAR of 13.27% of which Tier I comprised 8.2%. Post implementing Basel II, management expects CAR would stand at 12%. IOB has to comply with Basel II guidelines by FY08 due to its overseas branch network. We do not expect the bank to dilute its equity in the near term,” adds the report.

Anand Rathi’s Technical Speak- Ispat Industries

Ispat Industries has breached its intermediate resistance at Rs 18 and continues to sustain above that level. The substantial increase in volume along with the price indicates that the bulls are clearly committed to the stock.

The stock has clearly entered into a fresh bullish trajectory after a prolonged accumulation. Buy this stock aggressively between Rs 18 –Rs 19.50. We expect the stock to reach a target of Rs 26-30 in the medium term. Keep a stop- loss of Rs 16.20, says Anand Rathi Securities in a report dated Sep 12.

At 12:14 pm on BSE, the Ispat Industries share was at Rs 19.20, up 3.5 per cent over Tuesday’s close. Total traded quantity was 94,36,728, against the two-week average of 1,27,70,261 shares. A week ago, the stock was at Rs 18.75 and month earlier Rs 13.89.

Properazzi, 99acres tieup

Indians and Indian companies looking to buy or rent property abroad will soon have a four-million-strong international listing of real estate options to choose from via, a property portal launched by Info Edge (India) Ltd which plans to team up with, part of Properazzi European Group SL.

This strategic partnership will allow users of both these portals to access both
real estate databases and listings for buying, selling and renting both commercial and residential properties.
99acres, which was launced in 2005, says it has some 1,500 builders, 20,000 brokers and 40,000 individuals listing on the site, with some 200,000 residential and commercial properties from around 100 cities for sale.
Properrazzi hosts some four million properties across 49 countries.

“In the past few months, we have received requests...for buying or renting property in places such as Dubai, the UK, particularly London, Malaysia, Singapore and even some parts of US. Besides, NRIs are also increasingly investing in property in Gurgaon, Bangalore, Kochi, Hyderabad, Pune and Chennai. This tie-up will help us leverage both these customers,” said Hitesh Oberoi, chief operating officer of Info Edge.

As for foreigners using Indian websites to buy properties, some analysts say that because the real estate market is fragmented and riddled with cumbersome paperwork, difficult norms and non-trasparency, the task could be challenging.
Still, “if portals, such as 99acres, are able to provide clarity to users on processes and paperwork, create awareness and transparency, it will only grow the market and allow users to increase their access in markets new to them,” said Abhishek Gupta, senior manager, research and strategic consulting, at real estate firm Jones Lang LaSalle Meghraj.

This international partnership is part of 99acres expansion strategy to be a one-stop property shop for its users. In the next three-four months, the company will expand to 25 cities from 11. It is looking at tying up with firms offering moving services, insurance and interior decoration services as well.
“99acres is currently growing at over 100% and we will continue with this growth in the future. In the next one year, we plan to invest $3-5 million on our expansion,” Oberoi said.

Revenues come in from the fees that the brokers and builders are charged for listing their property on the website. For individual users, the service is free unless they want value-added services such as alerts, which come for Rs 500 per listing. For brokers, it is Rs15,000 for 300 listings in a year, while for builders, the fees range from Rs15,000 up to Rs40 lakh.

Info Edge posted revenues of Rs147 crore through the year ended March, with the marriage portal and together contributing around 7%